How To Negotiate Like A Normal Human Being.
As someone who’s been trained in negotiation my whole career, I’m going to untangle and demystify what it takes to be a strong and thoughtful negotiator in the real world of work.
When I deal with self-styled ‘trained’ negotiators who try too hard to control the outcome, there’s a rigidity to their approach that feels detectable, like they’re trying to play me with a marked deck of cards. It makes me unwilling to compromise from the start and signals a lack of EQ that’s at the core of a successful win-win.
The good news is, with the right approach, being a strong negotiator isn’t about pretending to be something you’re not, it’s about using the right tools to be something you are - yourself.
Wink - Negotiation Is Self Advocacy.
Someone once said that in business, you don’t get what you deserve, you get what you negotiate. It’s a good reminder that at its core, negotiation is about self-advocacy; knowing what you or something is worth, and making sure that worth is realized.
Nudge - Negotiation Is Not Sales.
There’s so much hyperbolic literature on negotiation. You can be forgiven for thinking the only way to do it right is to turn yourself into a kick-ass FBI hostage negotiator straight out of central casting. I can’t remember the last time I had to negotiate the release of a hostage. And I’d really rather not have to. There’s a big difference in how negotiation is applied in the majority of our daily working lives, versus scenarios that sell books.
To this end, it’s important to understand what negotiation actually is.
Negotiation is the point where both sides have gone far enough in the sales process to know they want something from one another. It’s now a case of agreeing on the terms. In work, the terms usually signal the start of the relationship, not the end. We rarely do deals where we wash our hands and run away. It’s usually connected to us or someone else in the business.
That’s the trouble with “Learning The Negotiation Tricks of an FBI Hostage Negotiator”; they don’t go out for a beer with the terrorist afterward. Life or death requires a different set of rules. Work, by all accounts, is not life or death. We have ongoing relationships to manage, partners to please and bosses to annoy.
The Jolt - Negotiation Tools.
Over the many years that I’ve been negotiating everything from contracts, acquisitions, and pay rises, to getting kids to eat vegetables, I’ve seen most successful negotiations come down to the application of 9 core tools.
If you apply all of them, in an order appropriate to the situation, you’re going to be a strong negotiator. But that’s not always realistic or even possible. Not everything is a full-stack billion-dollar deal. Just getting out of bed can feel like a negotiation with the ghost of the night before.
In the real world, negotiation is scrappy, often awkward, and usually undefined. And we all have different levels of comfort with the tools we need to apply. The skill here is to build them up through practice. Even if you only use a handful now and then, you’ll put money in your pocket, I promise.
Value, not price.
Min and Max.
A little more.
The Third Party.
I’m going to take each one of these in order, throwing in the occasional analogy of buying a car because we can all get our heads around that.
Value, not price.
When you approach a negotiation involving some kind of financial exchange, it’s easy to get locked into the spiral of price. Price is easy to comprehend because it’s a number. Value, however, is harder to grasp. Yet value is where the win is. Let’s say you see a car for $20k and you manage to get it for $16k. You may feel great about having kept $4k in your pocket. But let’s say a friend bought the exact same car for $18k. You might think you got the better deal. But their car had a 5-year warranty, lower miles, one owner, and full-service history.
The value equation works in the other direction. Don’t trade on price if you can trade value instead. Giving away things that are of no value to you, but could be to the other party, is a great tool. For example - time. You might not be in a hurry to sell something, but creating urgency and then using that to negotiate instead of price is powerful. The point is, always think about value first.
Min and Max.
This is a tool that still tries to slip from my fingers when emotion takes over. The minimum is the absolute lowest you are willing to accept (selling), and the maximum, is the absolute most you are willing to pay (buying). You need to set these in your head before entering any negotiation, whether it’s for money, time, or resources. A great negotiator friend of mine once told me to “never buy until you’ve bought, and never sell until you’ve sold”. What she meant was, don’t let your emotions close the deal. We’ve all done it - seen a car we love and bought it in our heads before we’ve even agreed on the price. Keep your emotional cards to your chest, set your min or max, and don’t leave money on the table.
The piss-off point.
Early in my negotiating days, I was a low-baller. I’d shake the tree hard, and see what fell out. Over time, I realized that understanding the other party’s piss-off point, the point at which we all become offended by a ridiculously low offer is critical to a successful negotiation. The craft is knowing where that point is, and going in at just the right level to rearrange their head furniture, without setting fire to the couch. Do your research on mark-ups or industry norms. Put yourself in their shoes. If a car is $20k on a dealer lot, and you offer $8k, it’s probably going to piss them off. Your credibility is shot. If you offer $15k, you’ll have tipped their head furniture enough for them to know there’s a sale to be had.
A trick to helping assess the piss-off point is to get them to make the offer first. Never open if you can avoid it. If they’ve asked you to “make an offer”, simply ignore the question with a question in return. For example, reply “Ok, but how much are you looking for?”. Not everyone is comfortable rebutting a question with a question, but it works. Just two weeks ago, I was on vacation and the rental property was not up to snuff. I called and asked for compensation. They asked me how much I thought was reasonable. I simply asked them the same question back. Without hesitation, I was offered 20% off the entire cost of the trip. It was double what I thought I could get.
The hardest but most rewarding thing you can do in any negotiation is to simply shut up after you make an offer. Zip it. The number of people I see who try and justify an offer with the why, what and where with bells on, is beguiling. Don’t do it! It takes practice because we humans like to fill awkward spaces with guff and nonsense. Say it and zip it. Please.
Second only to zipping it, walking away can also feel uncomfortable, but it’s powerful. I’ve walked away from virtually every deal I’ve done; “I need to think about this” or “Sorry, it’s not for me”. What you say is not as important as what you do - you leave the deal. In a working relationship, this may feel hard. In this kind of situation, a walk-away could be as simple as some time-out, “I’ll need to take a day to think about it”. There’s nothing wrong with taking a time-out as a half-step to a walk-away. If the deal is running at a pace that is too fast for your comfort, it’s essential you pull the brake. Take 5.
In my experience, the best deals I’ve been involved in have left both sides feeling like they got something meaningful. You can equate your negotiation skills to how much you managed to scorch the earth to keep the money in your own pocket, or to how you left the other person feeling, and in turn, how that made you feel about yourself. It’s your choice, but karma, and reputation, always finds a way.
A little more.
Every time I’ve closed a negotiation, just before the deal is shaken or signed, I ask for a little more. Usually, it’s some kind of value versus price, and it’s small enough to be an easy win. I’ve asked for everything from a pack of batteries when buying an appliance, an extra 0.25% on a deal term, to a full tank of fuel after an expensive service. It could be as small as an extra few days to prepare for something or getting the boss to agree to show up at an event. Don’t be afraid to ask.
The third party.
This is the one that may feel the most disingenuous, but it doesn’t need to be. Using a third-party reason why you can’t do a deal is a strong tool. It’s the equivalent of telling the car dealer “my partner will kill me if I buy this”, which, by all accounts, could be an entirely real possibility. The point is, it’s powerful when used in an appropriate way. Your boss, a client, or a team member all have needs that you can use to factor into a negotiation.
Finally, I’ll leave you with a game I like to play.
Pick a purchase you’ve had your eye on for a while. Something motivating. Like a new TV. Now set up a separate deposit account with your bank. Every time you make a purchase where you use a negotiation tool to get a better deal than the price offered, bank the difference. There’s nothing more motivating than getting someone else to buy you a new TV.
With love & deals,